There is increasing evidence that the FGF family of signaling molecules plays a central role in the regulation of many aspects of vertebrate embryogenesis, and may also play a role in tumorigenesis. Recently, a gene called sprouty (spry), which apparently encodes an inhibitor of FGF function, has been identified in Drosophila melanogaster. We have isolated and begun to characterize two mouse genes, Spry1 and Spry2, that are closely related to Drosophila spry (D-spry). The experiments described here take advantage of recent improvements in transgenic mouse technology to study in detail the functions of these two genes. Advanced gene targeting methods employing both Cre and Flp DNA recombinases will be used to produce an allelic series of mutations at the Spry1 and Spry2 loci, and to obtain tissue-specific knock-outs of these genes. Studies of the mutant animals will be performed to elucidate the specific functions of Spry1 and Spry2 during development, and to investigate their possible function as tumor suppressor genes. In addition, we describe experiments using a gene replacement strategy to explore the uniqueness or equivalent of Spry1 and Spry2 gene functions.